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The power of many: ABCs of collaborative innovation throughout the extended enterprise

Overcome obstacles and increase the odds of successful innovation by understanding the ABCs of collaborative innovation.
IBM Institute for Business Value study
Industry: Cross-industry
Last updated: 06 Mar 2009
   Download complete IBM Institute for Business Value study ( 192KB )
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Summary

CEOs today recognize that they must be innovative if they are to keep up with an ever more complex, global and dynamic environment. The IBM Global CEO Study 2006 found that, to drive innovation, many top CEOs are collaborating beyond their organizations – with their extended networks of suppliers, customers, business partners and others. Such collaboration, however, is easier said than done. In fact, 50 percent of strategic alliances fail.1 Based on our research, experience and two examples of best practice cases, we present here a framework – the ABCs of collaborative innovation – that can improve the chances of success in this increasingly important area.

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Abstract

Know your ABCs: A framework for collaborative innovation
To avoid the pitfalls of collaborative innovation, our research and experience show the best building blocks are: alignment, boundaries and commitment. These ABCs can be done separately or in combination, depending on the capabilities, strategic goals and innovation objectives of the organization. Note that by calling these the "ABCs" we do not mean to imply that this is in any way easy, but rather that there is a way of simplifying the complexities of collaborative innovation (see Figure).

Figure

A = Alignment
Vertical alignment translates the business strategy's innovation objectives into an organizational strategy and an implementation plan. Horizontal alignment typically requires the creation of a new organizational unit or the redefinition of existing ones. Often, job functions, responsibilities and performance measurements will need to be altered to include collaboration for innovation. By translating the business strategy into operational goals, and by creating structures and processes to enable collaboration throughout the organization, leaders can motivate and enable new behavior.

B = Boundaries
Strategic partnerships require building trust, navigating different approaches to decision making, agreeing to legal terms about ownership and other often contentious issues, collaborating across cultures, managing communications and operations, and so on. Defining the partnership, establishing governance terms and then building a technological and operational infrastructure for ongoing collaboration across organizations can significantly improve the chances of success.

C = Commitment
Organizations that are serious about collaborative innovation make an ongoing commitment to transformation and change. Creating a collaborative culture happens over time through leadership communication and reinforcement, the development and ongoing tracking of key measures, and institutionalized learning and knowledge management to continually develop key capabilities needed for collaborative innovation.

Conclusion
As a vital part of an overall business strategy, top CEOs recognize the need to make organizational changes to support collaborative innovation and derive profit from valuable ideas, no matter where they originate. The ABCs – alignment, boundaries and commitment – provide a framework for unlocking the power of many, enabling collaborative innovation throughout the extended enterprise and improving performance.

How can IBM help?
Key solutions relevant to the issues and opportunities raised in this study include:
Strategy and Change: Fuses business strategy with technology insight to help organizations develop, align and implement their business vision to drive innovation and growth
Organization Change Strategy: Reduces transformation and operation costs by fully aligning and focusing key stakeholders around transformation goals and business priorities
Collaboration and Partnering: Helps organizations operationalize innovation strategy through partnerships and collaboration - both internal and external

To read the full report, download the PDF file at the top of this page.

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About the authors
iLawrence Owen
Lawrence Owen is the Global Leader of the Organization and Change Strategy practice within IBM Global Business Services.
iCharles Goldwasser
Charles Goldwasser is the Americas Leader of the Organization and Change Strategy practice for IBM.
iKristi Choate
Kristi Choate is a Senior Managing Consultant in the IBM Organization and Change Strategy practice.
iAmy Blitz
Amy Blitz is the Strategy and Change Leader for the IBM Institute for Business Value.
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